Generated with sparks and insights from 49 sources

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Introduction

  • To forecast Pfizer's free cash flow (FCF) for 2025-2027, we need to analyze historical financial data, current financial guidance, and make reasonable assumptions about future performance.

  • Based on Pfizer's 2024 financial guidance, the company expects revenues between $58.5 to $61.5 billion, with operational revenue growth of 8%-10% including Seagen's contribution and excluding Comirnaty and Paxlovid revenues.

  • For 2024, Pfizer anticipates adjusted SI&A expenses between $13.8 billion to $14.8 billion and adjusted R&D expenses between $11.0 billion to $12.0 billion.

  • Assuming a similar growth trajectory and cost structure, we can project the FCF for 2025-2027 by applying the expected revenue growth rates and adjusting for anticipated expenses.

  • Key assumptions include stable operational growth, continued cost realignment savings, and no significant changes in tax rates or share repurchases.

  • Using the 2024 guidance as a base, we can estimate the FCF by subtracting capital expenditures and adjusting for changes in working capital from the operating cash flow.

Historical Financial Performance [1]

  • 2022: Pfizer reported total revenues of $100.3 billion, a 30% increase from the previous year.

  • 2022: Net income was $31.4 billion, up from $22 billion in 2021.

  • 2023: Pfizer's financial performance included significant contributions from COVID-19 products like Comirnaty and Paxlovid.

  • 2023: The company reaffirmed its 2024 financial guidance, indicating stable performance expectations.

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2024 Financial Guidance [2]

  • Revenue: $58.5 to $61.5 billion, including $8 billion from Comirnaty and Paxlovid.

  • Seagen Contribution: Expected to add approximately $3.1 billion in revenues.

  • Operational Revenue Growth: 8%-10% including Seagen, excluding Comirnaty and Paxlovid.

  • Adjusted SI&A Expenses: $13.8 billion to $14.8 billion.

  • Adjusted R&D Expenses: $11.0 billion to $12.0 billion.

  • Adjusted Diluted EPS: $2.05 to $2.25.

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Assumptions for Forecasting [2]

  • Revenue Growth: Assumed to continue at 8%-10% operational growth including Seagen's contribution.

  • Cost Realignment: Expected to deliver annual net cost savings of at least $4.0 billion by the end of 2024.

  • Capital Expenditures: Assumed to remain consistent with historical levels.

  • Tax Rate: Assumed to be stable at around 15%.

  • No Share Repurchases: Assumed no significant share repurchases in 2025-2027.

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Projected Revenue Growth [2]

  • 2025: Projected revenue growth of 8%-10% including Seagen's contribution.

  • 2026: Continued operational growth expected at similar rates.

  • 2027: Revenue growth may stabilize, with potential for slight deceleration as market conditions evolve.

  • Key Drivers: Continued success of Comirnaty, Paxlovid, and Seagen's oncology portfolio.

  • Market Conditions: Assumed stable economic conditions and no major disruptions in the pharmaceutical market.

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Cost Structure and Expenses [2]

  • SI&A Expenses: Expected to be in the range of $13.8 billion to $14.8 billion for 2024.

  • R&D Expenses: Projected to be between $11.0 billion to $12.0 billion for 2024.

  • Cost Realignment: Anticipated savings of at least $4.0 billion by the end of 2024.

  • Operational Efficiency: Continued focus on improving operating margins through cost management.

  • Expense Growth: Assumed to grow at a moderate rate, aligned with revenue growth.

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Capital Expenditures [2]

  • Historical CapEx: Pfizer's capital expenditures have been consistent with industry standards.

  • 2024 Guidance: No specific CapEx guidance provided, assumed to remain stable.

  • Future Projections: CapEx expected to align with historical trends, supporting ongoing R&D and manufacturing capabilities.

  • Investment Focus: Continued investment in innovative technologies and infrastructure to support growth.

  • Impact on FCF: CapEx will be subtracted from operating cash flow to calculate FCF.

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Free Cash Flow Calculation [2]

  • Operating Cash Flow: Derived from projected revenues and adjusted for operational expenses.

  • CapEx: Subtracted from operating cash flow to determine FCF.

  • Working Capital: Adjustments made for changes in working capital.

  • 2025-2027 Projections: Based on 2024 guidance and assumed growth rates.

  • Final FCF: Estimated by subtracting CapEx and adjusting for working capital from operating cash flow.

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